Daily Management Review

Morgan Stanley buys Eaton Vance for $7B


Morgan Stanley announced that it has reached an agreement in principle with asset management firm Eaton Vance to buy its business for $ 7 billion.

Alex Proimos via flickr
Alex Proimos via flickr
The deal, according to a press release, will allow the American bank to strengthen its asset management division.

Eaton Vance currently manages assets of about $ 500 billion, and the takeover of the company will increase Morgan Stanley Investment Management's portfolio to $ 1.2 trillion. The revenue of the combined business will be more than $ 5 billion.

The transaction itself will be paid in both cash and shares. Specifically, Eaton shareholders will receive $ 28.25 in cash for each of their shares, as well as 0.5833 Morgan Stanley shares for each of their Eaton shares. This brings the premium to Eaton's share price at the close of trading on Wednesday.

Amid the announcement of the deal, Eaton shares rose almost 50% at the opening of trading. Morgan Stanley quotes practically did not react to the news about the purchase of Eaton Vance.

source: cnn.com